UChicago 2018.

In his theory on the wages of labor, Smith contends that the balance of power in negotiation for wages is firmly on the side of the masters. To begin with, he posits that “the workmen stand in need of a master to advance them” (75) both the requisite materials to perform their work, as well as enough wages to constitute subsistence for the worker’s family. Coupled with the landlord’s superior ability to endure a period without profit (76), Smith’s view of the role of business can be seen as an expression of one of the benefits of a civilized society over a rude one: wealth will still be able to ‘trickle down’ even in tough times. The cost of this stability for the worker is, however, apparent: “in all such [labor] disputes the masters can hold out much longer” (76), making striking (or other forms of work stoppage) ultimately more costly to the strikers than the employers (as the workers can seldom end up victorious). Smith does not see this imbalance of power as a flaw, even as he admits that each party is equally reliant on the other in the long run. Rather, he believes that benefit, along with profit-making, to rightly belong to the master. In his time, however, the law prohibited “with so much severity the combinations of servants, laborers, and journeymen” (77), so perhaps it is natural for Smith to believe it just for the master to have the clear advantage in combination. For the master, it is also easier to combine because of much smaller numbers, and because the tradition had reached a point where collusion had become 'tacit’ and 'uniform’. The two reasons cited for workmen combining endure to this day: “the high price of provisions, sometimes the great profit which their masters make by their work” (77), but according to Smith, neither complaint is valid-the first because the price of provisions cannot, except in times of universal suffering, rise so high as to cause the worker to starve (the cost of course reflecting the amount of labor in their harvest), and the second because Smith has shown that the master deserves any profit he reaps from his land or his factories.

Bearing that in mind, how would Smith react to rise (and now fall) of organized labor and the prohibitions against monopolies in current times?